Thursday, June 25, 2015

All income tax refunds to be put directly in bank accounts: Central Board of Direct Taxes

NEW DELHI: In a step that would bring delight to taxpayers, the Income Tax department has put in motion a new plan which will ensure that any refund on tax paid is safely deposited in their personal bank account as soon as it is processed and released.

The department is also planning to fully adopt and use banking services to end the current system of sending I-T refunds over the value of Rs 50,000 via cheques through the postal department.

CBDT Chairperson Anita Kapur, during a recent interaction with the media, said the plan is being worked out on priority and is aimed at bringing an end to taxpayers' grievances regarding this particular service.

She said that Central Board of Direct Taxes (CBDT) got in touch with banks and their regulator, Reserve Bank of India (RBI), after it found that the problem of wrong refunds or no refunds at all was continuing unabated.

RBI, Kapur said, told them that in the e-environment, when a refund is sent directly to a taxpayer's bank account, the existing protocols are such that banks do not match the name to the account number.

"They only look at the account number and to whichever account number the cheque is issued, the (refund) will get credited there.

"We have a large number of instances where people quote wrong account numbers and, if we were to send refunds to those account numbers, and the banking system does not match the account number with the name, then the chances of taxpayers being further aggrieved are much larger," the CBDT boss said.

Kapur added that after analysing the problem, CBDT, the apex policy-making body of I-T department, thought of bringing about some changes.

"Now, we are trying to work out a system that when a taxpayer gives his account number and if we can do some kind of prior matching with the bank... that is one step we are going ahead and if we get the comfort-level that the bank account number and the name of the taxpayer matches, we should be able to push all the (refunds) automatically to the bank account rather than sending them through speed-post, which is the current practice," she said.